Grant Corporation's Stock Is Selling for $40 in the Market

Multiple Choice

Grant Corporation's stock is selling for $40 in the market. The company's beta is 0.8, the market risk premium is 6 percent, and the risk-free rate is 9 percent. The previous dividend was $2 and dividends are expected to grow at a constant rate. What is the growth rate for this stock?

A) 5.52%
B) 5.00%
C) 13.80%
D) 8.80%
E) 8.38%